Steamboat Springs  Steamboat Springs Finance Director Deb Hinsvark has put together a 2012 budget that will continue positioning the city for the future.

Hinsvark will present the budget to Steamboat Springs City Council members during a daylong hearing Tuesday. City Council members asked her to prepare a general fund budget with a 5 percent decline in sales tax revenue from this year. A majority of council members supported reductions in services to make up for a reduction in revenue instead of dipping into reserves.

Hinsvark said last week that she supported those suggestions because of her economic outlook.

“We’ve balanced this budget with minimal cuts, but we’re looking at a continuation (of decreased revenues) for the next five years,” she said. “The economy isn’t pushing us forward and could fall backward.”

Presentations from groups requesting funding from the city will take place from 8 a.m. to 4:30 p.m. in Citizens Hall at Centennial Hall. Current city funds also will be discussed during that time. A public comment period is scheduled from 3:30 to 4 p.m.

Hinsvark, who will replace Wendy DuBord as the city’s deputy city manager Oct. 9 in addition to retaining her duties as finance director, said the 2012 budget accounted for projected sales tax revenues to decrease about $858,000 from this year’s estimated collections of about $17 million.

Sales tax revenues have declined from a peak of $19.6 million in 2008 to $16.8 million in 2009 and nearly $16.7 million in 2010.

City Manager Jon Roberts said the city has reduced its expenses 40 percent since 2008. Cuts included the city’s move to a four-day work week, a 10 percent reduction to managerial salaries and eliminating vacant positions while maintaining existing service levels.

City Council President Cari Hermacinski said that although it’s another year of cuts, she doesn’t anticipate it to be as difficult as past years.

“In 2009, we cut fairly aggressively — 28 percent — which was a big, big cut,” she said. “My fear is oftentimes we have the tendency to only look one year in the future. There might be a temptation to say, ‘Let’s use reserves.’ I think 2013 is going to be a tougher budget year than every year I’ve been on the council, which is every year we’ve been in the recession and now, technically, out of it.”

Hinsvark said the 2012 budget could include changes to bus routes and activities provided by the Parks, Open Space and Recreational Services Department. She said other budget measures could include privatization or elimination of some services, restructuring, reworking existing contracts, leasing instead of purchasing capital equipment and pursuing new revenue sources.

Hinsvark wouldn’t provide any more specifics because the budget had not been presented to City Council members.

The budget didn’t include the use of reserves to make up for lost revenue. According to the 2011 budget, reserves totaled nearly $14 million in 2010. Of that total, Hinsvark said $6.3 million was unrestricted and unallocated, essentially the city’s “cushion.”

During Hinsvark’s midyear budget update Sept. 6, City Council member Kenny Reisman suggested the city pursue other possible revenue sources instead of cutting and using reserves. He said last week that revenue sources could include looking at some user fees and the cost for ambulance services, which are lower than in many other communities.

“We talk so much about cut, cut, cut,” Reisman said. “I just want to make sure there weren’t other opportunities to bring in other revenue opportunities for the city that need to be explored.”

Hinsvark said 2013 would be a difficult budget year because the city will start paying the Iron Horse Inn debt. But she said the measures the council plans to take next year would help position the city for what Hinsvark thinks could be a tough future.

“I don’t anticipate any real changes in our revenue sources and our expenditures, actually,” she said. “We’re trying to hold the line as much as possible until we can come up with something more strategic instead of just balancing the budget.”

Comments

Hinsvark said 2013 would be a difficult budget year because the city will start paying the Iron Horse Inn debt.

Yeah, cause up to now it was interest only. Which is why City Council needs to find a way to change city charter or such so that no delusional future city council could ever make such a horrible mistake without voter approvals.

We really need to require any future large financial commitment (ie bonds) to require voter approval. It is truly unacceptable that a previous city council was able to spend money and approve such crazy bonds without voter approval.

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We have heard little about the Iron Horse since the city government assumed management. A bottom line summary of interest and management costs vs anticipated loss on a sale and prepayment penalty should be done. We may discover we'd be better off taking the loss now than prolonging it.

Different revenue sources are a real option, but we must not get carried away trying to find money to maintain service levels that ought to be reduced. On the other hand, some areas must not be cut further.

I have called for our police force to have staffing returned to pre-cut levels, and new officers added for DUI prevention. By my count, 75% of police activity is in response to alcohol based incidents. I call for a fee to be assessed on liquor license holders, a small percentage based on the volume of their sales, to cover the costs of this service.

Additional disbursements from this fund could mitigate higher fees at city recreational venues. We must not set the fees so high that the youth of our community cannot afford to participate. Having constructive activities available is the greatest deterrent to juvenile alcohol abuse. It is only fitting that be provided by these fees.

Taxes on MMJ dispensaries fall into the same category, they must be used to fund juvenile possession prevention through constructive activities and police salaries. Taken together, these comprise a sizable reduction on general fund obligations.

Finally, the practice of continuing to collect more than we spend and keep the excess in a government savings account must be reduced. We should have no more in that account than we need to maintain a good credit standing. The rest should be returned to local residents who pay most of those taxes. I call for a rebate to local residents for the tax they pay on their groceries, by my estimate $200 per person per year. For a family of 5 struggling to keep their kids fed, clothed, and enrolled in constructive activities, $1000 would be a tremendous boost. Most of it would flow right back into the local economy, spreading the benefit even further.
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One more suggestion regarding all those worthy programs we are asked to fund. I propose the city hire a staff of grant writers who would serve to help all with funding from sources outside the city government. The staff would be salaried, and the funds for that expense would come from a small part of each successful grant application, a standard part of grant expenses. If complete successful this would eliminate all costs of funding the non profits while increasing the monies they have for their missions.
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John F, it shouldn't be the role of government to provide grant writers for non-profits, as much as it shouldn't collect a tax to subsidize businesses. Let the non-profits hire their own grant writers, and the businesses fund the airline subsidies themselves.

JF,
Well, it appears that the bonds for Iron Horse have ridiculous prepayment penalties, but it appears these bonds trade at fair market value and the City could simply buy them for cash value and either hold them as "cash reserves" (continue to pay on them from general fund as they sit in reserve fund) or retire them to reduce the city's debt. And then the city could do something with the Iron Horse because the amount of the penalty would be greatly reduced.

BTW, if there is any commonsense in the world then it should be quite hard for SB to get grants for a while. A wealthy city such as SB is making choices between luxuries while so many other cities are struggling to survive.

So I am very skeptical that increased grant writing will result in any great increase in funds. It is entirely more likely that they will not get funding that will allow reducing the city's funding. If anything, the grants that are available tend to require matching funds and so on, and thus would require increased funding.

Lastly, all of your ideas concerns is starting to make it less likely that I would vote for you. It is good to have ideas, but it concerns me that you seem convinced your ideas are right with so little supporting information other than your self confidence. It seems to me that you could so easily agree with or propose something truly stupid. I suggest that you more carefully say what ideas you think should be researched and what you are sure is the right thing to do.

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If it should not be the role of government to provide grant writing assistance it certainly should not be their role to simply give out taxpayers money.

The grants assistance program allows us to help them get more money than what we would have given, and by funding it with a percentage of grant funds it can be a net zero cost. But what these small nonprofits do not have is the capability to hire independent grant writers. Once the nonprofit resource program is begun it can be self funding and reimburse the city for the initial costs.

I am willing to state my interest in these types of ideas even though I know they still need development. Many others are involved, I have had conversations with people from supermarket managers to police chiefs to the wealthiest businessmen in town. The details for making these ideas work will come from all these and many more contributors. The point is that the way we have been doing things is is need of substantial improvemente, and that requires new ideas.
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"If it should not be the role of government to provide grant writing assistance it certainly should not be their role to simply give out taxpayers money."

Well, depends on the costs and likelihood that writing grants will result in useful awards. It makes sense to simply give out taxpayer money if money spent on grants is unlikely to return more useful money than the total expense of writing grants.

The tricky part about grants is that grants so often come with conditions. So maybe Horizons could find a $10,000 grant, but it may be limited to music instruction requiring a $5,000 matching contribution. But Horizons might be looking for gas money and so it'd make more sense to give them gas money than ask them to come up for money for a program they never previously considered important.

Overall, I'd say that government really does not need "new ideas" since the most important ideas on improvements are readily known in the private sector. The most important idea is to make continual improvements or be eliminated. Such as precisely why does City need a deputy city manager? City manager has how many direct reports and yet needs a deputy manager?

The City needs a Deputy City Manager so that, when the City Manager is gone (for example, because of a life-threatening sky diving or skiing accident), there is a competent person on staff who can keep the City running.